OTTAWA (Reuters) - The tax-cutting fiscal conservative who steered Canada’s economy through the global financial crisis is keeping his job as finance minister after the Conservative Party won the May 2 election.
Prime Minister Stephen Harper included Flaherty in his new cabinet, which he announced on Wednesday.
Jim Flaherty is known as a hard-hitting partisan who doesn’t fear controversy or shouting matches in Parliament to defend the Conservative government’s policies.
He says he learned to be tough as a young hockey player to compensate for his small stature and that trait has carried over into his political career.
But the cheerful 61-year-old lawyer with a self-deprecating sense of humor also describes himself as a pragmatist. He shrugged off his instincts for small government during the recession to introduce massive stimulus spending and run up a record budget deficit.
Both the combativeness and the flexibility came in handy when the Conservatives held just a minority of seats in the House of Commons from 2006 until now, and needed the support of opposition members to pass legislation.
Now, with a decisive majority, and the worst of the global crisis over, Flaherty’s job just got easier.
Days prior to his re-election Flaherty told Reuters he would not change the broad outlines of his latest budget if the Conservatives won, but there could be minor tweaks to take into account better than expected fiscal numbers to date.
As finance minister since 2006, he was responsible for six budgets. He is the only cabinet minister that Harper has never moved and is the most senior finance chief in the G7 group of advanced economies.
During the campaign, Harper referred to Flaherty as the “best finance minister in the world”, crediting him with Canada’s economic recovery and its healthy banks.
“That’s a pretty darn good endorsement,” said Dan Miles, a communications strategist who has known Flaherty since 2001 and was on his staff in Ottawa from 2006 to 2008.
Flaherty vows to balance the budget by 2014-15 and cut corporate taxes to 15 percent next year from 16.5 percent this year, despite opposition demands to raise the tax.
Under pressure from manufacturers hit by a strong Canadian dollar, Flaherty has made clear he is adamantly opposed to intervening in foreign exchange markets. In a May 11 event in Washington, he said he is not a believer in a weak currency.
Married and the father of grown-up triplet sons, Flaherty hails from an Irish, Catholic middle class family and often sports a trademark green tie.
Flaherty is no stranger to controversy. During his 10 years in Ontario provincial politics, he drew derision for ideas like getting homeless people off the street by jailing them.
In Ottawa in 2006, he roiled markets and received death threats after a surprise move to tax income trusts, breaking a Conservative campaign promise.
Later, he butted heads with some of his European peers by waging a successful battle against a proposed global bank tax in the G20 group of emerging and advanced economies.
Those who know Flaherty say he adores his job. But he says he never meant to spend his life in politics.
“Things happen,” he said. “This great recession ... happened and one doesn’t leave in the middle of a recession.”
Reporting by Louise Egan; editing by Peter Galloway and Janet Guttsman